International Marketing

Multinational market regions and groups

Guillermo Berlioz
A multi-national market or region is created when some
countries agree to take firm steps to reduce trade and tariff
barriers, the main objective is the economic benefit for the
participating countries.
 NAFTA

Total Population DIC 2018

• USA 328,835,763 16.3% 18.3%
• MEXICO 131,788,270 77.2%
• CANADA 37,029,478 497,653,511
 Free trade agreements (FTAs)
• The world is flooded with economic cooperation agreements as countries
seek economic alliances that will improve access to free markets.

• The European Community became the world's largest unified market with
the incorporation of the (EFTA) European Free Trade association with a
total population 524,098,603 million (2018)
Asian Pacific Basin
Market evolution 2018
 Success of an economic union

• The key elements will depend on political, economic, social

and geographical criteria.
 Models of multinational cooperation

• Multi-national market groups take many forms that

vary in the degree of cooperation, dependency, and
interrelation between participating nations.

• Complete and economically integrated union.

 Regional cooperation groups

• Regional cooperation groups is a multinational market group

in which several governments jointly participate in companies
to develop profitable industries for each economy.

• Each country undertakes to participate in the financing of new

projects and to buy a specific part of the processed products.
 Example
• Colombia and Venezuela cooperated to build a hydro-electric
generator plant in the Orinoco River.

• They share the costs of production and the electricity or

energy that is produced.
 Free Trade Areas
• FTA: Its key role is to provide a mass market without barriers
that impede the flow of goods and services between
participating members., created to reduce or eliminate
customs obligations and non-tariff trade barriers between
partner countries.

• U.S. has FTAs with Israel and negotiates with Mexico and
Canada through NAFTA
 Customs unions
• Consolidates the cooperation stage with FTAs

• The European Community (E.C.) was a customs union before it

became a common market.

• Guatemala and Honduras signed a year and a half ago a

cooperation program to form between both countries a
customs union, apart from belonging both to the CA4, in July
2017, El Salvador joins the customs union.
 Common Markets
• A Common Market agreement removes all tariffs and other
restrictions on domestic trade, adopts a set of common
external tariffs and discards all restrictions on the free flow of
capital and labor from nation to nation.

• The goal is to achieve economic integration.

Global markets and multi-national market groups

Markets are enlarged through preferential tariff treatment for

participating members and common tariff barriers against
outsiders.
 European Community
One of its main purposes is the free mobility of labor and capital within the
economic community and the socialization of national economic policies of
the member states, to promote throughout the community a harmonious
development of economic activities and closer relations among its member
nations.

The European Economic Community is a kind of super-government in

economic affairs and relations of the Community that assures common
economic policies reduced tariffs among its 28 members.
 Members of the Schengen area

• The Schengen area is one of the biggest achievements of the EU. It is a

space without internal frontiers, in which EU citizens, businessmen and
tourists can circulate freely without being subject to border controls.

• Since 1985, it has gradually grown and now covers almost all EU member
States and some non-EU partner countries.
Map of the Shengen
Potential Candidates
 Actual Candidates
• Albania
• Macedonia
• Montenegro
• Serbia
• Turkey
 Potential Candidates

• Bosnia y Herzegovina
• Kosovo
 Creating a single currency

• https://www.ecb.europa.eu/ecb/html/index.es.html

• https://www.youtube.com/watch?v=Aijn_4TFF_8&list=PLnVA
EZuF9FZk_wcITEK5G9QpS0j4LpB7o
 Currency Exchange Rate

https://www.xe.com/es/currencycharts/?from=EUR&to=USD
&view=10Y
 Brexit

• Brexit is an abbreviation of two words in English, Britain

(Great Britain) and exit (exit), which means the exit of the
United Kingdom of the European Union.

• The origins of the term Brexit seem to be traced back to 2012,

when the Grexit was in vogue, used to speculate on the
departure of Greece from the European Union in the most
intense moments of the crisis in that country.
 BREXIT Explained

• https://www.youtube.com/watch?v=NgVhRVr
ANhA
 Possible consequences
• No country in the European Union has shown itself to be publicly
favorable to Brexit.

• The British consultancy firm global counsel warned that after the Brexit,
the EU would become a less attractive business partner worldwide and
lose international power.

• But it was also said that this can be offset by greater political integration,
since the United Kingdom is one of the members who are more strongly
opposed to greater integration, and a more coherent foreign policy.
 The anger of young people
From the UK departure from the European Union: "We have
lost the right to live and work in 27 countries "
 Enjoy your day

“Trade is the best cure for prejudice” Baron de

Montesquieu